Tuesday, July 30, 2013

Appeal Until You Get Approved

Social
Security Disability Insurance (SSDI) is a federal entitlement created
in 1956 as an insurance plan for long-tenured workers with the
misfortune of becoming disabled before retirement. Today, the program
has ballooned into a $135 billion behemoth threatening to collapse under
its own weight. Left unchecked, decades of loose standards and poor
enforcement may cause a collapse of the system that would culminate in
thousands — if not millions — of deserving recipients being deprived
their rightful benefit.
Federal
disability insurance began from humble beginnings, but unfortunately,
over time, has grown dramatically, and today the fastest-rising cost
for Social Security is not retiring baby boomers, but skyrocketing
disability insurance benefits. In 1970, the disability insurance program
was financed with a payroll-tax rate of only 0.8 percent of wages.
Today, the cost of SSDI has tripled relative to the 1970 level with
disability benefits now making up 18 percent of all Social Security
costs. This is a marked difference from 10 percent in 1990. The number
of people on SSDI in 2012 exceeded the entire population of New York
City at more than 8.7 million participants.
The biggest
contributing factor has been the ease with which benefits can be
obtained. While it is tempting to blame the aching knees and backs of an
aging population, the truth is that American workers are healthier and
fitter today than they were when SSDI was in better fiscal shape.
Instead, the answer is the program has grown soft around the middle for
three reasons: low standards, enticing benefits and far too little
control over its own screening process.
It is unfortunate that the
disability insurance program has morphed from a program for permanently
disabled workers with a substantial work history who were over the age
of 50 to a rapidly growing program covering an increasing number of
marginally disabled workers.The screening process of approving SSDI applicants, once run by the Social Security Administration,
has been foisted upon a system of appeals run by an overworked and
underregulated network of administrative law judges (ALJ). In this system, a
growing amount of applicants and their well-practiced lawyers have come
to treat initial approval-or-denial of benefits as merely the first stop
on the way to an appeal, where the odds of success are higher. Worse,
these lawyers face badly orchestrated incentives that can cost taxpayers
dearly.
Part of the solution for rising disability costs
is to refocus benefits on the most disabled individuals, coupled with
incentives for employers to keep disabled people working. In 2010, one
out of every 50 working Americans applied for federal disability
benefits. Furthermore, with a challenging employment market, this
program has also functioned as a fallback for workers without employable
skills. Only half of those who enter the disability rolls will ever
return to the workforce.
The expansion of this program is
troubling even in a booming economy. In a country with a nearly $17
trillion national debt the fiscal unsoundness of this program is even
more alarming. The program is growing faster
than the payroll-tax revenues that fund it, and the Congressional
Budget Office predicts that the SSDI trust fund will be entirely
depleted by 2016. At that point, barring legislation to further fund
SSDI, the program will be forced to begin paying smaller benefits, or
will raid another program such as Social Security’s Old Age and
Survivors Insurance trust to cover the balance.
Grappling with the problems posed by a rapidly expanding SSDI system would be simpler
if it were the case that the working-age population had simply gotten
older and less able to earn a living. Instead, the principal drivers of
SSDI growth are a loosening of eligibility requirements, increasingly
attractive benefits and an application process that has become incapable
of distinguishing between truly disabled workers and those who should
be rejected. Together, these three factors have combined to create a
modern SSDI program very different than the one envisioned by its
architects. Going forward, it is essential that Congress take
significant steps to rein in SSDI’s growth. Those changes will
inevitably be decried as insensitive and unjust, but they are essential.
To do nothing — to continue to prioritize the able-bodied over the
truly infirm — is far worse.By MacMillin Slobodien , an executive
director of Our Generation, a nonprofit advocacy group, which is
launching the Reform SSDI Now project.

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